Air India has entered into an interline partnership with Bangkok Airways that will allow the Tata Group-owned airline’s passengers connections to 10 Southeast Asian destinations beyond the Thai capital.
25.08.2023 - 14:12 / skift.com
Air India has sealed a jumbo deal for about 500 new planes worth more than $100 billion at list prices, in what could become the single largest order by any airline as it seeks to reinvent itself under its new owners, industry sources told Reuters.
The deal, split equally between France’s Airbus and rival planemaker Boeing, was first reported by Reuters in December and could finally be announced as early as next week, the sources said.
Air India has agreed to purchase 250 Airbus planes, split between 210 single-aisle A320neos and 40 widebody A350s, and 220 Boeing aircraft including 190 of its 737 MAX narrowbody jets, 20 787 widebodies and 10 777Xs.
While Airbus and Air India signed the agreement on Friday, Boeing agreed its deal with the airline on Jan. 27, a date that marks a year since Tata regained ownership of the former state-run carrier, sources told Reuters.
Airbus declined to comment. Air India did not immediately respond to an email seeking comment outside of regular business hours.
In a note to employees on Jan. 27, the airline said it was “finalising a historic order for new aircraft”.
The order reflects Air India’s strategy to modernise its ageing fleet and re-capture a solid share of trips between India’s large overseas diaspora and cities such as Delhi and Mumbai, dominated mainly by Gulf rivals such as Emirates with its young planes.
The deal for 400 narrowbodies will also allow Air India to win a bigger share of regional international traffic and the domestic market, setting up a battle on both fronts with IndiGo.
While the Airbus figure is slightly lower than the 275 originally envisaged, the sources did not rule out a provision by Air India for top-up acquisitions or leases at a later point.
It was not immediately clear to what extent the numbers in the agreement included options that could change the total tally when the final orders are in.
The record order aims to put Air India in the league of large global airlines and make it an influential customer for planemakers and suppliers at a time when its home market is seeing a strong post-COVID-19 travel surge.
Air India, with its maharajah mascot, was once known for its lavishly decorated planes and stellar service but its reputation declined in the mid-2000s as financial troubles mounted.
Under its new owners, the airline is looking to restore its reputation at home and abroad as a storied carrier with impeccable service and world-class planes.
Air India has entered into an interline partnership with Bangkok Airways that will allow the Tata Group-owned airline’s passengers connections to 10 Southeast Asian destinations beyond the Thai capital.
Antitrust watchdog Competition Commission of India (CCI) has approved Tata group’s plan to merge its full-service carriers Air India and Vistara.
Tata Sons and Singapore Airlines have agreed to consolidate Air India and Vistara by March 2024.
Air India is close to placing landmark orders for as many as 500 jetliners worth tens of billions of dollars from both Airbus and Boeing as it carves out an ambitious renaissance under the Tata Group conglomerate, industry sources said on Sunday.
The Tatas will let go of Indian full-service carrier Vistara as they look to merge the airline with the more “internationally-recognized” Air India, Air India CEO Campbell Wilson said on Monday.
India is expected to overtake Germany to become the world’s third most powerful travel and tourism market by 2032, according to World Travel and Tourism Council’s Economic Impact Research.
The Google pages of many hotels — including premier properties — in the Himalayan hill towns of Darjeeling and Kalimpong in West Bengal have been defaced for fraud ahead of the holiday travel rush. Anybody looking for hotels in Darjeeling using the search engine will come across prominent photographs containing the hackers’ phone numbers over a section displaying pictures of rooms and amenities. “We have been lately facing incidents where fraudsters are posting their mobile numbers with payment options to book not only our properties but also several others in the region. We are continually monitoring this and flagging all such posts as ‘spam’ for Google to review and have them removed,” said Viraj Oberoi, director of Elgin Hotels & Resorts, a luxury heritage hotels chain with properties in Darjeeling, Kalimpong and Sikkim. Cyber miscreants are removing hotel details and creating their own profiles with personal contact details, said Sandipan Ghosh, general secretary of regional travel trade body Eastern Himalayas Travel and Tour Operators’ Association. “Surprisingly, they’re also luring customers to pay in advance while knocking off the goods and services tax charge,” Ghosh said. In India, the goods and services tax on hotels range anywhere between 12-18 percent, depending on the pricing. Customers, while trying to book hotels online for Darjeeling, have been duped to pay advance amounts to bank accounts which don’t belong to the owners of the accommodations. “We’re in touch with the cyber cell department to track such incidents closely and take action accordingly,” Ghosh added.
India will invest around $12 billion over the next two years in airports, aircraft and recruitment to meet the booming demand for air travel. The country aims to increase the number of airports from the present 148 to 220 by 2025, for which private builders will contribute roughly $9 billion, with the balance coming from the government-run Airports Authority of India. It entails new terminal construction, greenfield projects, and refurbishment of existing buildings, including old military airfields from the colonial era, as per a Bloomberg report. “We need to put in place the civil aviation infrastructure and capabilities that by 2047 would be able to support a $20 trillion economy within India,” said the country’s civil aviation minister Jyotiraditya Scindia at the ongoing CAPA India Aviation Summit in New Delhi. Scindia said passenger capacity at India’s six major airports is expected to grow to 420 million in four years from 192 million today, and Indian carriers’ fleet will grow to 2,000 aircraft in five years from 700. Additionally, India has eased leasing rules for airlines to lease more aircraft to address aircraft shortages as travel rebounds from the pandemic. He also highlighted how India had tweaked its airplane leasing program to enable airlines to add more aircraft to meet passenger demand, including more “wet leasing,” or renting of planes with crew, for domestic and international routes. Tata Group-owned Air India last month announced a record order for 470 jets and is due to take another 25 leased aircraft.
Indian companies have failed to set targets to reduce corporate travel emissions, according to an annual report by campaign group Transport & Environment. Globally, only 50 companies out of 322 have set targets to reduce business travel, with information technology (IT) services company Wipro paving the way in India. Wipro has achieved a 15-20 percent reduction in air travel emissions between the 2015 and 2020 period. Among all 10 Indian companies featured in the ranking report, only IT services provider Tech Mahindra reports on air travel emissions specifically. “Advancements taking place in India are mostly being led by the technology industry. We invite these technology companies to continue to work on their travel policies and demonstrate leadership to catalyze change in other industries,” said Denise Auclair, corporate travel manager at Transport & Environment. Of the companies that have targets, only four companies meet the “gold standard” of reporting air travel emissions and commitment to reducing them by 50 percent or more, by 2025 or sooner. These are Novo Nordisk (pharmaceuticals, Denmark), Swiss Re (finance, Switzerland), Fidelity International (finance, Britain) and ABN Amro (finance, the Netherlands).
Indian airlines are expected to record a consolidated loss of $1.6 to 1.8 billion in the financial year 2023-24 ending March 31, 2024, according to aviation consultancy CAPA India. The full-service carriers are predicted to incur a loss of $1.1-$1.2 billion. With a net induction of 132 planes next fiscal, Indian airlines are estimated to take the total fleet of all carriers to around 816 aircraft. However, more than 100 aircraft from different Indian carriers are grounded as a result of supply chain and other issues. Highlighting the potential for growth in aviation, India’s civil aviation minister Jyotiraditya Scindia said that it was time for India to look at manufacturing aerospace products. He added that the aggregate fleet size of domestic carriers is estimated to reach around 2,000 aircraft over the next five to seven years. He claims that by the end of this year, up to 15 Flying Training Organizations (FTOs) could be established, bringing the total number of such organizations to 50 from the current 35. He emphasized the expansion of the drone industry, stating that it is projected to reach a value of approximately $40 billion by 2030 and produce about 250,000 million employees. All industries have an S-shaped evolution curve, and the minister noted that India is currently in the “infancy and growth phase” of its civil aviation industry.
Air India has become the latest entrant to hop on to the bandwagon of ChatGPT. Doing away with an outdated manual pricing system, the airline announced recently that it would be shifting to an algorithm-based software for setting airfares to extract more revenue from each flight. Its modern revenue management software continuously anticipates where people want to visit and how much each flyer is willing to pay, rather than the old method of having one fare for each block of seats — thereby ensuring higher revenue per flight. The airline will reportedly use GPT4 — the latest version of the revolutionary chatbot — to improve the FAQ section, pilot briefings, and more. Speaking at an event recently Air India CEO Campbell Wilson said that the use of the chatbot will not be “gimmicky”, but will be to actually enhance the airline’s functions. Last month, Air India partnered with cloud-based software company Salesforce to transform its customer experience. In another wheel of change under its new owner Tata, Air India is also testing ChatGPT to replace paper-based practices. “Frankly the system is almost so bad it’s good,” Wilson said, adding that this offered the chance to start from scratch rather than “jury-rig” existing architecture. The Tata Group is also integrating the Tata-related airlines, with the merger of Vistara with Air India and the integration of low-cost carriers Air India Express and AirAsia India. As part of its expansion plans, the Tata-owned airline last month had placed a record deal of 470 aircraft — 250 from European planemaker Airbus and 220 from U.S. aircraft manufacturer Boeing — at a list price of over $70 billion.
A debate over market access was rekindled at an aviation event in India as foreign carriers seeking additional capacity to serve more routes in India feared the Tata Group-owned Air India’s rebirth and record order of 470 jets might capture most of the market. Dubai’s Emirates, Turkish Airlines and Kuwaiti carrier Jazeera Airways have all called for sharp increases in air traffic rights to and from India to meet demand. Vietnam and Indonesia also want more flights, an Indian official said. However, speaking to Reuters India’s civil aviation minister Jyotiraditya Scindia said the country has no plans to increase air traffic rights for the United Arab Emirates. He instead urged domestic carriers to fly long haul and help establish new hubs. “We are going to see an explosion of air traffic in India in the years to come,” he said, adding he wanted domestic carriers to focus on international expansion. “We are not getting enough share from this market,” Turkish Airlines Chief Executive Bilal Eksi said. Dubai has requested an extra 50,000 seats a week on India routes while Kuwait’s Jazeera Airways said the current weekly allowance of 12,000 was inadequate and asked for the cap to be raised to 28,000 seats.